Imagine being in an emergency situation and you suffer an injury that needs to be treated at the hospital. A few weeks later, you get a medical bill in the mail. Insurance covered some of the cost, but you still owe a few thousand dollars. You are probably thinking, “I don’t have that type of money to pay up front”. These type of scenarios happen every day. That is why it is very important to have some kind of emergency savings to help take care of unexpected situations.
Many people in the United States do not have emergency savings. According to a report from Bankrate, “29% of Americans surveyed have no emergency savings”. If you were wondering what an emergency savings is, it is money that you put into a savings account that is available when you run into an emergency. Money can be used for an injury, death of a relative, lost job, etc. The emergency savings can provide you with enough money to pay the unexpected costs or keep you settled during that time.
How Much Money Should I Save?
You may be wondering how much money should be put into your emergency savings account. It clearly depends on your current lifestyle, but Business Insider suggest: A single person should save, on average, about three months’ worth of living expenses- so long as this person typically lives within their means. Dual-income families need to save double- six months of living expenses. For retired individuals, they need to save about eight months’ worth of living expenses. If you follow what is suggested based of your style of living, you should be well prepared if an emergency were to happen.
Reverse Mortgage Line of Credit
A reverse mortgage line of credit can be a great way to keep an emergency fund ready. Just like any line of credit, the money is accessible at your convenience. Another great reason to choose the line of credit option is that any money you do not touch just grows over time. Any money you do not use, is not owed when the loan comes due. You only owe the amount you use. Having an emergency is already enough of a hassle, why should you add to your worry, by not being able to pay for something unexpected?